Household and firm exposure to heat and floods in South Asia

This paper examines the differential exposure of poorer households to heat and floods in South Asia. The use of spatially detailed data on climate shocks and relative wealth allows the analysis in this paper to capture highly localized variation in wealth, heat and floods. Climate change is increasing household exposure to extreme heat, floods and other disasters.

The paper finds that poorer South Asian households experience more heat than better-off ones. In urban areas, poorer households also experience more recurrent flooding. Using spatially detailed data on the universe of firms in India, this paper also finds that smaller firms are more exposed to heat and flooding. The paper concludes by discussing potential mechanisms that could explain these disparities in exposure to climate shocks.